Labor backs small business tax cuts

Labor will back a federal government move to bring forward tax cuts for companies with annual turnovers less than $50 million.

Those companies will have their tax rate cut to 26 per cent in 2020/21, then 25 per cent the following year, under legislation that will be introduced to parliament next week.

"Labor has always been the friend of small business," Labor leader Bill Shorten and shadow treasurer Chris Bowen said in a statement on Friday.

The federal opposition says it will pay for it by delaying the introduction of its proposed Australian Investment Guarantee by 12 months.

The guarantee would give all businesses in Australia the ability to immediately deduct 20 per cent of any new eligible asset worth more than $20,000, with the balance depreciated in line with normal depreciation schedules from the first year.

Assets such as tangible machinery, plant and equipment such as trucks and utes and intangible investments (such as patents and copyrights) would be eligible for the immediate deduction.

"With a Shorten Labor government, 99 per cent of businesses will receive a tax cut, no business will have their tax rate increased, and all businesses will be able to plan and invest with confidence and certainty," Mr Shorten said.